Nolet USA Launches Harlem Kruiden

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FILED NOVEMBER 1, 2009

Dear Client:

You’ll recall we reported in July that Diageo planned to start distributing a Jagermeister look alike, Harlem Kruiden, in the fall. That was only part of the story. It turns out that Nolet Spirits USA, who owns Ketel One and has a distribution j-v with Diageo, is the one launching Harlem. Diageo North America will distribute the brand. Produced in Holland, Harlem will roll out nationally across the U.S. beginning this month. The suggested retail price is $22.99 per 750ml bottle.

“The launch of Harlem represents a new chapter in our family business,” said Carl Nolet, Jr., executive vp, Nolet Spirits U.S.A. “In our research, we spoke to shot drinkers across the country and discovered that Harlem has a broad appeal and that many of them are ready for a new shot drink. We’re thrilled to enter a growth category with such an exceptional product and to share a piece of our family history with U.S. consumers. ”

This marks Nolet’s first consumer brand introduction since Ketel One in 1983. “...Harlem will play a central role in the future of Nolet Spirits U.S.A.,” said Bill Eldien, chief, Nolet Spirits U.S.A. “Harlem is new and different and will have a marketing campaign to reflect that.”

Harlem will be supported by an extensive, multi-million dollar, marketing campaign empowering consumers to “Call the Shots.” The campaign will be executed in partnership with Renegade, a New York-based marketing firm specializing in creating digital and guerrilla experiences.

DIAGEO DROPS BORDEAUX

It’s a classic case of excess supply and dwindling demand. Diageo Chateau & Estate Wines (DC&E) will not distribute Bordeaux wine for the first time in 35 years due to “enormous stocks” of unsold Bordeaux, the Associated Press is reporting. Clearly price is a big factor. Consumers are increasingly trading away from imports, particularly higher priced imports such as those coming from Bordeaux. The exchange rate is also a big problem for importers.

Diageo “aggressively” liquidated its warehouse reserves, which has caused Bordeaux prices to dip below wholesale cost and taken a “huge” toll on the market. Diageo is offering famous Bordeaux labels to American retailers at a 50% discount. This makes it nearly impossible for other Bordeaux importers to sell their wines. Once Diageo’s supply of Bordeaux wine is sold-out, will it become much harder to find in the US? As the article points out, Diageo was one of the largest Bordeaux suppliers in the US.

Bordeaux prices steadily rose between 1982 and 2005 as Robert Parker and others helped build a luxury image around the wine. The article also claims that Diageo and Costco, for example, purchased huge orders of the wine and then hoarded it, which made demand appear larger than it actually was. As you may expect, prices followed the supposed demand. The nail in the coffin was when vintners asked far too much for the 2006 and 2007 vintages, according to the article, causing consumers, wholesalers and retailers to cancel orders. Companies like Diageo were left with the overpriced wine.

What are your thoughts? Let us know at megan@beernet.com.

IMPORTED ROSES STILL ON FIRE

Rosés are still on fire despite the recession. Imported rosés priced $12 and above grew 11 times faster by volume than total table wine sales, according to Nielsen retail scan data in the 52 weeks to September 19 and reported by CIVP/Provence Wine Council. Sales volumes for imported rosé wines increased by 20.9%, whereas total table wine volumes increased by only 1.8%. “The tremendous growth rates for imported rosé wines continue to affirm their appeal to the American wine consumer, despite the very difficult economy,” said Danny Brager, vp, Beverage Alcohol Team, The Nielsen Company.

In terms of dollar value, sales of imported rosé wines at the $12 level and above grew by 28.4%, seven times faster than the 3.7% increase for total table wine dollar sales during the same period. This data, showing growth in value (28.4%) outpacing growth in volume (20.9%), suggests consumers are “trading up” in the imported rosé category.

France remains the leader in the category, producing 28% of all worldwide rosé wines by volume. Provence is the leading rosé-producing region in France, accounting for 40% of the French rosés labeled AOC (Appellation d’Origine Contrôlée, or controlled area of origin.)

WSD BRIEFS:

DINERS PLAN ON SPENDING 20% LESS per meal at restaurants in 2010 than they did in 2009, according to a new study by AlixPartners LLC who surveyed 1,000 customers. Americans plan to spend an average of $11.49 per meal next year after reportedly spending $13.25 per meal 9 months ago. Weekly restaurant visits are up from last year, while monthly visits to fine dining establishments are down -36%.

JOE MONTANA OF THE 49ers is trying to sell his Calistoga wine estate, Villa Montana, for $49 million. It spans more than 500 acres and the main residence features three bedrooms and 3 1/2 baths.

Until tomorrow, Megan

“Most human beings have an almost infinite capacity for taking things for granted.”Aldous Huxley

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